FACTORS OF PRODUCTION

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FACTORS OF PRODUCTION
FACTORS OF PRODUCTION
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Labour
Factors of Production
Land
Capital
Entrepreneurship
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CAPITAL??
CAPITAL
All resources??that are made by man??to assist
production are capital. Capital is a man-made
resource used for production.
Real World Example
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Is it capital?
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Is it capital?
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Is it capital?
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You are wrong, please try again
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(No Transcript)
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You are WRONG!
You are RIGHT, or...
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If the car is used as a taxi!
TAXI
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If the car is used for private consumption
without production.
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CHARACTERISTICS OF CAPITAL
CHARACTERISTICS OF CAPITAL
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Is the bull capital?
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(No Transcript)
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CAPITAL
CAPITAL
All resources that are made by man to assist
production are capital.
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Very GOOD!!
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Characteristic of Capital
1. made by man
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Characteristic of Capital
2. Increase??productivity ???of other resources
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Characteristic of Capital
3. Involve cost of production
Guided MCQ Practice
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How can we classify different capital?
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P.162 Types of Capital
by looking at the ownership???
Capital
Private Capital
Social Capital
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The mic used by LEON is private capital
What we focus is the mic that LEON hold
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I can use this mic , to sing louder! It is my
capital.
Private capital is the capital owned by private
individual.
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Government will build more road and railway
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New road
NEW ROAD
Railway
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Welcome !!! New road and railway can shorten the
time on traffic


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Both road and railway are social capital as they
are owned by
Hong Kong SAR government
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social capital
social capital
social capital
Victoria Harbor?
land
Guided MCQ Practice
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P.163 Fixed, working liquid capital

• Fixed??capital capital goods that are durable
• Working??/circulating capital raw materials
  used in production. Its physical form is changed
  during production.
• P.164 Liquid??/financial capital money held to
  buy other types of capital goods
• Human capital peoples knowledge, skill,
  talents beauty valuable
• Capital formation Capital production

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• P.165 Capital consumption capital goods get
  worn out their value will drop capital value
  falls due to wear-and-tear depreciation??
• ve Capital accumulation
• Capital formation rate gt Capital consumption
  rate
• societys total stock of capital goods will rise
• -ve Capital accumulation
• Capital formation rate lt Capital consumption
  rate
• societys total stock of capital goods will fall

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8.3 LAND
8.3 LAND
resources provided by nature all kinds of
natural resources????, e.g, oceans and woodlands
a gift of nature
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Characteristics 1. Land is fixed??in supply. The
amount of natural resources is fixed in supply.
We cannot change the supply of land but the
supply of land for a particular use is not
fixed. 2. The creation of land does not use up
any scarce resource. 3. Land is geographically
immobile/immovable. The location of land is
decided by nature. If it is moved by human
efforts, it is not land any more. The land in
its natural state. However, when they are
irrigated and modified by man. Scarce resources
are used to make it available for production, so
it is not land any more.
Concept Practice
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8.4 ENTREPRENEURSHIP
8.4 ENTREPRENEURSHIP
An entrepreneur???is the one who owns the
business and sets up business deals. He may also
organise??and control the other factors of
production. The entrepreneur (1) makes all the
major decisions (????), (2) bears risk (????) and
involves in (3) managing (?????) the
business. CIF 8.2 Separation of ownership
(shareholder) management (Board of Directors)
in some large enterprises
Practice WS P.2Q2
Guided MCQ Practice
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Labour
Chapter 8
Production processes
Capital
Land
Goods Services
Entrepreneurship
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• Choose the correct answer and fill in the blanks.
• Mr. Lee is the owner of a bookstore and hires
  Sylvia as a sales staff of his firm. Distinguish
  between the economic roles played by Mr. Lee and
  Sylvia. Explain your answer. (4 marks)
• Learn to answer
• Mr. Lee is (a labour / an entrepreneur) of the
  bookstore. He has to make important ________ of
  the business and bear the ____ as the profit from
  the bookstore can be positive (gt0) or negative
  (lt0). (2 marks)
• Sylvia is (a labour / an entrepreneur) of the
  bookstore. She provides the human ___________,
  both mental and ____________, used in working. (2
  marks)

_________
decisions
risk
_________________
effort
physical
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P. 168 8.5
Factor mobility
Factor mobility can be classified into
1. Geographical mobility?????means the
ease????with which a factor can move from
employment at one location to another. 2.
Occupational mobility?????means the ease????with
which a factor can move from a job in one
industry to another.
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P.169 Factors affecting geographical mobility of
labor

• Transport costs (-ve factor) higher mobility if
  costs are low
• Economic conditions move from backward region or
  high unemployment rate region to a prosperous one
  for better economic prospects/jobs/higher living
  standard
• Social political factors unrest to peaceful
  place
• Government encourage people to move by building
  more public housing estates providing better
  transportation recreational facilities

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P.170 Factors affecting occupational mobility of
labor

• Money income non-money factors workers tend to
  move to jobs that offer a more attractive salary,
  a better promotion prospect working environment
• Differences in skill lower occupational mobility
  in jobs that need specialised skills, e.g.
  electrical work plumbing
• Licensing in some professions reduces mobility

• Real World Example Concept Practice WS P.2 Q3
• Guided MCQ Practice

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P.171 Table 8.6 Mobility of other factors
Occupational mobility
Geographical mobility
Factor
Occupationally mobile
Geographically immobile mostly
Land
Specially designed capital goods immobile Raw
materials machine tools mobile
Building machine immobile Raw materials
machine tools mobile
Capital
Mobile?
Mobile
Entrepreneur
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P.172 8.6 Resources in HK

• Land little, a general lack, deep harbor,
  excellent location
• Labor well-educated hard-working, adaptable
  quick
• Large pool of entrepreneurs flexible
  adaptable quick
• Capital adequate, infrastructure, richly
  supplied